RUPERT Murdoch commands the world's second-largest media empire with his company News Corporation that has numerous assets both on and offline.
As all media increasingly migrates onto the internet, Murdoch's most valuable allies should be the search and content aggregation services that generate the majority of online traffic. Murdoch, however, has declared war on these third parties, starting with Google.
He has threatened to block all of News Corp's content from Google. The point of the exercise, he says, is to encourage people to pay for online content. Murdoch is tired of news on the internet being free to consumers.
His threat has been scoffed at by most. Generating revenue by charging for online content is not a new idea and has failed repeatedly for publishers, enjoying only marginal success in niche pockets.
The reason it doesn't work has to do with the nature of the internet, consumer expectation and the rise of social networking, specifically what is becoming termed as "social bookmarking", and which controls the direction of eyeballs online.
Through the grapevine
Simply put, people rarely access an online news site directly any more. Instead, they are likely to read an article on a website because a friend or other online connection has mentioned it, they have seen it on a news aggregation service such as Google News or it has shown up as a search result.
This new generation of internet users doesn't browse arbitrary content online - its members have a specific agenda and gravitate towards content that interests them. They may have a couple of news websites they frequent, but a majority of content they access will be indirect. Murdoch should know this - and I think he might.
Notorious civil libertarian and activist John Gilmore coined the saying: "The 'net interprets censorship as damage and routes around it." I believe the same can be said of charged-for content.
If Google and other aggregators are blind to your publication, it may as well not exist. And one of the best ways to make your publication invisible to these services is to request payment from potential readers.
It fails long before ethics enter into it. I believe it can be compared to having a brick-and-mortar shop without an entrance.
The same, but different
What can be achieved, however, is a balance between free content and advertising revenue that is supplemented by reader (or viewer, listener) donations. A fine example of this is the TWiT network that broadcasts exclusively online. Run by technology journalist and broadcaster Leo Laporte, TWiT claims to generate a good deal of its revenue from donations.
The content - mostly podcasts and internet broadcasts, or "netcasts" - is free, but if you would like to support it, recurring donations can be made. This is the 21st century version of a subscription.
And let's not forget advertising. Single instances of online advertising can't yet replicate the kind of revenue a publisher could generate from selling, for example, the middle pages of the Sunday Times, but it does offer a unique value to advertisers in terms of market targeting and, more importantly, opportunities to engage with customers in a way that offline media can only dream of.
The world of advertising hasn't fully grasped the engagement model yet - but we're getting there.
I find it hard to believe that someone with Murdoch's background and standing fails to know all of this, unless he is both stubborn and senile. What I suspect he is really trying to achieve is a new layer of relationship between content publishers and major aggregators.
At the moment all online content is indexed from an equal foundation as far as Google, and other major search providers, are concerned. It doesn't matter if you're Rupert Murdoch or Joe the blogger - your content will be processed in the same way and weighted by the same algorithms, presuming they meet the criteria to be indexed in the first place.
I think Murdoch is threatening Google to spark negotiations for a new kind of arrangement. I can't tell you what this agreement would look like or indeed whether this is Murdoch's true intention, but if it is I'll bet he's hoping it will be exclusive to News Corp. And I can't imagine him being successful.
If, however, Murdoch really doesn't understand the dynamics of online content - and let's not forget we're talking about the same man who thought Myspace would be a good investment - I'd like to offer him my services as an online media consultant.
Seriously Rupert, drop us a line. I'm not exactly an expert, but even I know that warring with Google is a bad idea.
- Fin24.com